PenCom cuts off more than 2,000 retirees from monthly payment over N500,000 rule

Over 2,084 pensioners who can no longer receive monthly pension payments and who left the Contributory Pension Scheme in the first quarter of 2022, according to information provided by the National Pension Commission (PenCom).

In its first quarterly report on “Enbloc Payment of Retirement Benefits,” the National Pension Commission made this disclosure and stated that the impacted workers had retired with less than N550,000 in their separate Retirement Savings Accounts with the Pension Fund Administrators.

They had, therefore, been refunded all their contributions into the scheme, it added.

PenCom’s report stated that, “During the quarter under review, the commission approved en bloc payment of retirement benefits to 2,084 retirees whose RSA balances were N550,000 or below and considered insufficient to procure programmed withdrawal or retiree life annuity of a reasonable amount for an expected life span.

“In this regard, a total sum of N519.51m was paid to the 2,084 retirees from both the public and private sectors.”

Annuity refers to the monthly pensions given by life insurance companies to pensioners under the CPS, whereas programmed withdrawal refers to the monthly pensions paid by PFAs.

Any employee with less than N550, 000 is expected to receive the full balance in the RSA from the PFA and then be permitted to leave the pension scheme, as per the Pension Reform Act of 2014.

PenCom criticised employers who deduct monthly contributions from their employees’ pay but fail to transfer those funds to the employees’ RSAs in their separate PFAs.